The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1887-02-06
The INSURANCE UNION
Foreign Companies papS Asaipa

Il legislature s to prevent insu us c'liiona
1t has been reported favo. sa1'e pool
Senate Committee ndsU1aOly by Il,
put upon its passage. A" WI De at oue.
the bill it prohibits tor. vs. understaps
S Spaas fro doing business 'ii is
ton to fix rates of insursn:s. Conbiaa,
one OF the cases where the Iar This is
oo"plish indirectly what it % c. Can &C.
directly, It's not Competent t'4 inc Do
legislature to restrict the ons r ,of The
domestic insurance comn psiSuons OF
pull under the genera Is aleS dOing
State, but it has power 10 - laws avs Of tbs
condition precedent to HfIes!crlbe as
t panieS oelng permitted to G sr com,
s Snelr pushes here, that t6 Sagfg on
STAND aloof from insurance ' ney Shall
compacts. The obvious re o Unions Or
RESTRICTION, If adopted, will ba 90 Oh this
solutlon OF the insurance combi .ue dls,
for 1t Is apparent that no ;,nuauOns
union can be successfully one ,r.,as.ufance
the nome companies al no -r!eu BY
foreign companies compelled ro WIN ths
or soandon heir business. ptie
The figures presented tn tbo
Committee seem to indicate If senate
more, that the ruling rates Of unothIng
nave been materially advanced hui S1 aa at
compact. and that they are in Wy o, Ine
OF what they should properly be eACss'
witness testified to an increase in hi, Uae
from IN per cent to 10 per cent ia rae
case, and rom 3 per cent to : no. - oes
IN another Another witness fo Csa'
insurance broker, stated that IocoI We y
surance companies pay an averaSa o NJ
per cent per month pI oft on their S,o ".
and 1t IL held at from SIS to Slo
share above par. This witness sto ~
directly that he knew by twenty vsa..
experience that the current rates a..
too high and not fair. OFT
We think the bill as reported bv -.
Senate Commi tee should become ls-
Its effect will not be to drive forsi,.
capital from the State. II foreign i
surance company can do a legitims,
insurance business in this State il c'S
do 1t without the aid of a pool. and =
1t cannot 1t has no business here. ?,
gllsh companies did not come be,
under any guaranty of rates or On
contract for business. They can
because they had unemployed can't,
and thought that this State present
an opportunity for earning fair rafe n
interest on that capital. They DID
business here for many years before HI.
formation of the compact, and tbsn
is no reason why they should not cnr.
tinue to do so If the compact should b
dissolved.
The substantial effect of this bill viii
be to encourage competition in tbs
business of insurance. As the matt,
now stands, if a new company il
formed it can do but a very insignia
cant business without joining the union
for the reason that union companies n.
fuse TO reinsure for the outside com.
pany or to divide its risks. Under hs
system OF free competition no such
thing could obtain, for rein,urs7cs
would be sought for in all proper cgg,
and would be arranged on the sane
basis as any other business propOltol
No valid argument can be uysi
against competition, whether it ah
insurance or other matters of genera
interest, a d we think the bill referred
to does not deserve the appellatlon Ola
"cinch' bill, but is really in the inter
est OF property without bsng
IN any way unfair to insurance Oon-
panies.-San Francisco Chronicle.